ATH Resources reports minimal disruption from snow

The Doncaster-based group was only marginally affected by the Arctic conditions in December and said trading in the first quarter has been in line with expectations.

Speaking ahead of today's annual general meeting, chairman David Port said: "The bad weather experienced in December 2010 caused only minimal disruption to production, although it did result in a delay of some shipments to customers following the cancellation of a number of trains and snow related road closures.

"However, an improved mix of sales and lower production costs largely offset any impact. The group continues to improve operating efficiency and reduce costs. However, the Glenmuckloch site, which reported geological issues at the end of the last financial year, continues to cause concern and the impact of this together with the recent dramatic rise in the price of gas oil will, if it continues to rise, put operating margins under pressure for the remainder of the year.

"On a positive note, the opening of the Netherton site is progressing well and is on schedule to commence production of coal in the current quarter. Netherton is now anticipated to exceed its production targets for the full year. Development of the Duncanziemere site is planned to commence later in the year.

"The group received a royalty payment of 2 million in January 2011 from RecyCoal Limited which is being invested in the new mine developments. Net borrowings are in line with expectations.

"The group is also pleased to announce that following the new market price related contract negotiated with EDF last month, it has successfully secured a 150,000 tonne extension to an existing market price related contract with Scottish Power. Deliveries to this contract will commence in October 2011.

"The group is on schedule to fulfil the final tonnage of its three remaining legacy contracts, the first two of which will end in March and September of 2012. It is anticipated that they will be replaced by new contracts at significantly higher prices."